Seriously, there probably isn't any single factor that explains it. Falling stock markets, favorable seasonals, falling dollar, unstable political situation, etc. None of them is sufficient, but many of them working in conjuction for long enough can change the psychology of the trading masses and swing them to a particular kind of action, which then starts feeding on itself.

As Vesselin says, there are many reasons for gold's strength. But let me highlight one, which is clearly visible in the Feed Index chart in Doc's Anals. It's basically the asset side of the Fed's balance sheet.

Just 15 months ago, in the wake of the 9/11 emergency, the Fed pumped $100 billion into its balance sheet temporarily. And that was big - close to a 20% increase. it was like injecting a rural trauma victim with a life-threatening dose of heroin, for lack of other anesthetics. Fifteen months later, that dosage is now the patient's daily regimen. In fact, as of this week, IT AIN'T ENOUGH.

To paraphrase the great Jim Morrison,

When I was back there in seminary schoolThere was a person thereWho put forth the propositionThat you can paper the world with dollars"Paper the world with dollars""PAPER THE WORLD WITH DOLLAHS"YOU CANNOT PAPER THE WORLD ... WITH DOLLAHS!!!